HOME
DV NEWS
SERVICE ARCHIVE SUBMISSIONS/CONTACT ABOUT DV
In
California, The Ballot Box And The Market
by
Seth Sandronsky
August
19, 2003
In
California, the market has done many folks wrong. Just ask ordinary people trying to find and keep work that pays
their bills.
The
GOP, with Arnold Schwarzenegger the leading candidate, is blaming Governor Gray
Davis for the market downturn. The
campaign against him is gathering steam, as the gubernatorial recall election
nears its Oct. 7 date.
Mr.
Schwarzenegger says that he wants to improve the state’s commercial climate.
Supposedly, he wouldn’t have allowed the mistakes of Davis’ budget director.
This
individual chose to ignore the math of the stock market bubble, and the
predictable plunge in capital gains tax revenue when (not if) the stock market
soured. The sharp drop in capital gains tax revenue when the stock market
dropped partly led to the state budget deficit.
Stock
prices to corporate earnings ratios had reached historical highs during the
late 1990s. Not that the Davis
administration is unique in its market-friendliness to speculative investment
trends.
The
same chumminess can be found in journalists adverse to criticizing the market
system that creates market bubbles that go pop in the night, and poverty amid
plenty. All are just the normal
workings of the market, doctrinally ignored as such by most professional
journalists.
Cut
to California in 2003. The 2001
recession, dot-com, stock and tech market meltdowns have left many firms and
their workers high and dry.
Some
Republicans claim that businesses are leaving the state due to its harsh
government regulations. One example is
rising costs associated with the state's workers’ compensation system.
Meanwhile,
manufacturing declines in California as foreign goods are flooding into the
state. Thank U.S. firms that have
relocated production to low-wage countries such as China where workers earn a
fraction of what Americans are paid.
What
gubernatorial candidate in California is discussing such capital flight? Or the migrant labor that follows it?
Is
any mainstream journalist posing such crucial questions to Davis or the recall
candidates? If not, why?
The
market for labor is central to the system.
The vast majority of Californians work.
This
political point is a non-starter for the state’s two parties of big business.
But that only holds true in the future if many Californians limit their
politics to voting.
In
the gubernatorial debate between moneyed elites, the everyday struggles of
people living in barrios, ghettos and weekly motels up and down the state is
off the radar screen. GOP rhetoric
about the state’s over-spending during the market bubble of the late 1990s is
an obscenity when you take an honest, open look at the majority’s daily
struggle to get by.
Their
opinions are basically overlooked by both parties, which claim to act and speak
in the general public’s interest. On
that note, Mr. Schwarzenegger, if elected governor, has promised to “clean
house” in the state capital of Sacramento.
Presumably,
this housecleaning will eliminate the state’s deficit. We can be sure that Wall St. rating agencies
will smile.
How
will this budget-balancing happen? The
GOP’s action entertainer candidate can turn to a fellow of Stanford
University's Hoover Institution for one way to reduce the deficit.
“Mr
Schwarzenegger's fame, his ability to command saturation media coverage and his
standing as a tribune of the people all might enable him to cow the unions into
submission,” Peter Robinson wrote in the Aug. 12 Financial Times.
Seemingly,
the high wages and retirements of unionized public workers are a drag on the
budget. Cutting spending on them will
help the state to control its finances and restore businesses’ bottom lines.
In
the Republican view, this fiscal policy will help to make the state’s economy
grow. Once, of course, public employees
earn lower paychecks and have leaner retirements.
The
trend of public debt, and the ideological and political pressure to attack
people’s living and working standards, is not just a “California thing.” To the contrary, such “global austerity”
rules the political roost, powered partly by “fellows” from think tanks such as
the Hoover Institute.
For
instance in France and Germany, establishment politicians are pressuring
public-sector workers to accept lower wages and smaller pensions. These elected officials claim to be
pro-growth and fiscally prudent.
Where
is the proof that slashing the buying power of the population will improve
public finances? How exactly does that
policy make private businesses prosper?
The
fact of the matter is such austerity turns upside down what Keynes discovered
about the market. That is the private
economy needs government stimulus during market downturns to stay afloat and
prop up ordinary people.
They
are the people whose work has created private wealth, increasingly concentrated
in too few hands. One result is slow/no
growth, with the California economy a case in point.
I
write as a recovering Democrat. In the
mid-1970s I realized that in the U.S. electoral politics is a shell around the
market.
It’s
run by corporations who fund elections.
These legal entities are the favored form of capital accumulation.
In
California and across America, Democrats and Republicans since around 1976 have
united to protect corporations’ profitability at the expense of the
majority. Under both parties, the
cutting of social spending and taxes have been tools to help financial and
industrial capital grow by shifting wealth from the many upward.
As
author and scholar Jason Myers has noted, there has been a reversal of
understanding how markets works that began with Democrat Jimmy Carter being
elected president in 1976. Subsequently,
living and working conditions have become increasingly precarious for more
Americans.
Elections
have facilitated this process. In
America, a powerful master class has gained more and more wealth, though many
people have been unable to see this.
This
is a striking feature of U.S. political culture. Author Gore Vidal has said that the way U.S. rulers stay out of
sight is one of the greatest political stunts of all time.
In
California today, the GOP’s strongman candidate for governor is trying to
capitalize on ordinary people’s expectation of government protection from the
market. It is understandable for them
to look to politicians for relief from the market downturn hammering the state.
Electoral
politics is an ideology that helps to prevent people from seeing their
connection with others in reproducing the system. Powerful institutions urge them to instead view the market as a
thing apart from their daily lives.
One
example of this was news reports that markets were or were not coping with the
recent electrical blackout in the Northeast and Canada. Against that backdrop, the California recall
election is more (or less) a response to the current market crisis of
electricity deregulation being framed in fiscal terms.
As
I see it, electoral politics are the equivalent of rearranging deck chairs on
the Titantic of our time. The
implications of this for real democracy could hardly be more momentous, beyond
the outcome of California’s recall election.
Seth Sandronsky is a member of
Peace Action and co-editor with Because People Matter, Sacramento’s progressive
paper. He can be reached at: ssandron@hotmail.com.
* Globalize
That: Capital Flight to China
* In
US, A Job-loss Economy Emerges
* For
Black Teens, Jobs Crisis Worsens
* A
New Day for Affirmative Action?
* In
California, A Racial Wolf in Sheep’s Clothing
* In
U.S., Slow Growth, Excess Inventory and Mounting Debt